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April 10, 2013

Austin's two big established broadband Internet providers, Time Warner Cable and AT&T Inc., said they were ready to make additional investments in their networks as they get ready to compete with the arrival of Google Fiber in 2014. "We're prepared for added competition," Time Warner said in a statement. "With a scalable, state-of-the-art network already in the ground across Central Texas and our experienced engineers developing next-generation network enhancements, we stand ready for any new competition to enter the market. We already provide fiber-based multi-gigabit speed for many commercial customers throughout our service areas, and, for consumers, we offer several tiers of residential service." AT&T, meanwhile, said that it is "prepared to build an advanced fiber-optic infrastructure in Austin capable of delivering speeds of up to 1 gigabit per second."

However, Tracy King, the company's vice president of public relations, said AT&T would do so only if "the demand is there and if we get the same terms and conditions as Google received." Those conditions, she said, include a faster regulatory approval process and the ability to build its network only in those neighborhoods where there is demonstrated demand for the service. "Google said it will build in neighborhoods where there is a high percentage of customers (that ask for the service), and we are the same way," she said. "Austin is a high-energy and high-tech community. We expect demand to be high. We want to meet that demand. We love competing, and we look forward to competing with Google and anybody else that wants to meet with us. We are asking to be treated like our competitors are treated."

The city of Austin has offered Google its rapid cooperation and that of Austin Energy in the development and construction of the Google Fiber project. Google isn't asking for financial incentives from the city, but it is getting access to city utility poles and city rights-of-way. That sort of response from incumbent communications carriers, industry experts said, might have been part of what Google was aiming for with its project. "It is a positive thing," said Bob Metcalfe, a computer networking pioneer who is a professor of innovation at the University of Texas at Austin. "One thing to look for is the impact on Time Warner Cable. The original motivation (for Google) was to light a fire under companies like Time Warner."

But Metcalfe said building fast metro networks is a gradual process that ultimately has to be accompanied by network modernization across the country. Metcalfe said he had seen test results for Google's network in Kansas City that showed blazingly fast speeds for access to Internet sites within the city. "When you leave Kansas City, it gets slow again," Metcalfe said. "It goes from 800 megabits to about 30 megabits." That, he said, is because the bulk of the Internet across the country has yet to be rebuilt to run at much faster speeds. "What we have is a chicken-and-egg problem," he said. "You have to start somewhere on new networks and then ladder up. It takes time."

One more immediate impact of the new network, he added, would be to bring better performance for Google's various services, including Google Apps and Google Drive, to Austin users. Google Drive offers massive online data storage to users. And customers of Google's high-speed network get free access to an initial amount of Google Drive storage - 1 terabyte of data. Gustavo de Veciana, a professor of electrical and computer engineering at UT, called the Google Fiber project "an exciting opportunity" for Austin, but not a cure-all for Internet service. "Their network addresses one of the potential bottlenecks, but there are many others," he said. Despite that limitation, he said he expects the network will attract new businesses to Austin to make use of its capabilities.

Blair Levin, a former chief of staff of the Federal Communications Commission, lauded Google for pushing the ball forward toward faster Internet access in the U.S. "Google has proved that there is a business model for selling abundant bandwidth as opposed to a business model for allocating scarce bandwidth," said Levin, who is now a fellow at the Aspen Institute in Washington, D.C. "They are saying this is not an experiment. It is a business. In Kansas City, Google did the country an enormous favor. They said, give us regulatory flexibility to design the business and give us access to city property so we can build a network to lower the cost" of access. Levin noted that a few other countries, including Japan, South Korea and Sweden, already have gigabit networks while the U.S. has lagged behind. Google is one of several players trying to help make that happen, he said. Other groups include the Gig.U Project, which aims to build fast networks in several university towns across the country. "Google is not the only one involved, but they are great," he said. "Austin ought to be really excited about what is going to happen when bandwidth is longer a constraint to innovation. It will become a place where people go to test out advanced televisions" and other new technologies.

Craig Settles, an analyst in Alameda, Calif., said about 150 communities across the country have built high-speed networks in recent years. Chattanooga, Tenn., he said, is the largest of those communities. In that town, the local electric utility built a network as part of a plan to upgrade its electric grid, and then it decided to offer broadband service. Most of the communities with fast networks typically have the active support of the local government or local utility company or both. Austin American-Statesman see additional coverage in the American-Statesman

Cablevision Systems Corp., the New York-based telecommunications and entertainment provider, is seeking a $1.9 billion term loan to repay debt, according to a person with knowledge of the deal. Bank of America Corp. is leading the transaction, which will pay interest at 2.75 percentage points more than the London interbank offered rate, with no floor on the lending benchmark, said the person, who asked not to be identified because the transaction is private. The company may sell the debt at 99.5 cents on the dollar, the person said. The seven-year loan will be used repay some of the Bethpage, New York-based company's outstanding borrowings. Its $1.68 billion term slice due in March 2016 was quoted at 100.6 cents on the dollar today, according to prices compiled by Bloomberg. The company has about $4.6 billion outstanding in loans maturing between 2015 and 2017, Bloomberg data show. Lenders have until April 12 at noon in New York to submit commitments, the person said.

Chief Executive James Dolan is giving his wife, Kristin, wider responsibilities, including oversight of sales of cable TV, Internet and voice products in addition to product management and marketing. The promotion for Ms. Dolan, who was named president of Cablevision's Optimum Services on Tuesday, comes a few weeks after the cable operator revealed the Dolans had separated on a trial basis. The separation was "completely amicable," the company said. Mr. Dolan said in a statement that Ms. Dolan will draw on her "proven leadership capabilities" to "serve as the Optimum brand steward" and oversee "day-to-day management" of customer initiatives. She will report to Mr. Dolan. Meanwhile, Brian Sweeney, who is married to Mr. Dolan's sister, is also being promoted. Mr. Sweeney will take on a newly created position overseeing corporate strategy, Cablevision said.

Cablevision is controlled by the Dolan family. Ms. Dolan, a 23-year Cablevision veteran who met Mr. Dolan at the company, has taken on a bigger role since late 2011, beginning slightly before the departure of former top operating executive Tom Rutledge, who left the company to become chief executive of Charter Communications Inc. in December, 2011. In recent months, Ms. Dolan has answered questions on company earnings calls alongside her husband and other top executives. In Tuesday's statement, Cablevision said Ms. Dolan has been "instrumental" in expanding Cablevision's outdoor Wi-Fi network and overseeing its investment in broadband upgrades.

The company also promoted Wilt Hildenbrand, longtime technology executive at Cablevision, to senior adviser of customer care, technology and networks. Mr. Hildenbrand will lead the development of "next-generation consumer systems and technologies," the company said. "Each of these executives brings more than two decades of experience to these new roles and they have provided exemplary leadership to Cablevision throughout their careers," Mr. Dolan said in the statement. The three join vice chairmen Gregg Seibert and Hank Ratner in the company's senior executive team reporting to Mr. Dolan. Bloomberg, Wall Street Journal